Written by Shantanu Kanade
Shantanu is a qualified international lawyer based in the Netherlands. He focusses on international dispute settlement. He is an experienced M&A lawyer as well who, apart from his legal engagements, is an academic mentor coaching mooting teams for prominent national law schools.
As the Permanent Court of International Justice (“PCIJ”) held in its 1923 advisory opinion on the Status of Eastern Carelia, “It is well established in international law that no State can, without its consent, be compelled to submit its disputes with other States either to mediation or to arbitration, or to any other kind of pacific settlement.”[1] It has been considered as a rule that is “so well established in international law” that the court felt no need to provide evidence of its existence, nor to elaborate on its precise content.[2] This principle of consent is arguably what sets apart, more than anything else, international adjudicatory bodies from their domestic counterparts. The jurisdiction of domestic courts and tribunals has a sound basis in domestic constitutional and statutory law and is accordingly not open to contestation by the parties before them on the ground of lack of consent. On the other hand, jurisdiction of international courts and tribunals can only be founded upon the consent of the concerned sovereign states. This is so because in the absence of a centralized power on the international level that exercises the judicial function through a judicial system empowered from above, all international adjudicatory bodies are empowered from below, being based on the consent and agreement of the subjects themselves.[3]
The ICJ has consistently reaffirmed the principle of consent as elucidated in the Eastern Carelia advisory opinion. The decision of the ICJ in the celebrated Monetary Gold Removed from Rome in 1943 case serves as a good starting point for this discussion. In that case, the court, inter alia, held: “To adjudicate upon the international responsibility of Albania without her consent would run counter to a well-established principle of international law embodied in the Court’s Statute, namely, that the Court can only exercise jurisdiction over a State with its consent.”[4] The Monetary Gold principle, as it has come to be known since, has been confirmed in several of the court’s subsequent decisions. For instance, in the East Timor case of 1995, the court stated: “The Court recalls in this respect that one of the fundamental principles of its Statute is that it cannot decide a dispute between States without the consent of those States to its jurisdiction.”[5] The ICJ’s reaffirmation of the consent principle is possibly best illustrated in its advisory opinion on Western Sahara, where it observed that “the consent of an interested State continues to be relevant, not for the Court’s competence, but for the appreciation of the propriety of giving an opinion.”[6]
The jurisdiction of ICSID requires an investment dispute of a legal nature between a state party to the Convention and a national of another state that is also a party to the Convention. In addition, the two parties to the dispute, the host state and the investor, must have consented to ICSID’s jurisdiction.[7] Participation in the ICSID Convention is not sufficient to establish jurisdiction since it does not amount to consent to jurisdiction.[8] One finds an erudite exposition of the principle of state consent in investment arbitration in Georges Abi-Saab’s much talked about dissenting opinion in Abaclat. He opines that for an ICSID ad hoc tribunal to take jurisdiction over a case, a triple-layered consent is usually required as follows: firstly, it must ascertain that the case falls within the jurisdiction of the ICSID as defined by the ICSID Convention and related instruments; secondly, that it falls within the bounds defined by the bilateral investment treaty or a multilateral investment treaty that would typically carry the consent to arbitrate of the host state and the home state of the investor; and thirdly, that the case is covered by the specific written consent of the parties to the dispute, which may be manifested with respect to a State party by reference to the relevant BIT or MIT or another unilateral act bearing its consent, such as national legislation. It may also be a compromissory clause in a contract between the parties and for the investor it can be the request of arbitration itself. The Tribunal, on its part, must ascertain the existence and scope of the consent of the parties within the limits prescribed by them in each of the above-mentioned instruments.[9]
When it comes to UNCLOS, Section 2 of Part XV contains what are called “Compulsory Procedures Entailing Binding Decisions”. Essentially, a state, by becoming a party to UNCLOS, also gives its consent to the jurisdiction of one of the four dispute settlement bodies, namely the ICJ, the International Tribunal on Law of the Sea, an arbitral tribunal constituted under Annex VII or a special arbitral tribunal constituted under Annex VIII. [10] Accordingly, in case of a dispute concerning the interpretation and application of UNCLOS between two States parties, either of them can unilaterally invoke the dispute settlement procedures without having to secure the consent of the other party. Having said that, it must be borne in mind that this mechanism is not “compulsory” in the absolute sense of the term. It is possible for the states parties to exclude the applicability of the aforesaid compulsory mechanism by agreeing to alternative dispute settlement procedures by virtue of the provisions of Part I of Section XV.[11] Further, as under Article 298, the parties may, by way of reservations, place limits on the jurisdiction of the relevant adjudicatory body to rule upon certain categories of disputes specified therein, for instance disputes concerning the interpretation or application of articles 15, 74 and 83 relating to sea boundary delimitations, those involving historic bays or titles and those concerning military activities, among others. Last not but not the least, even with respect to the provisions of Article 287 that encapsulate compulsory procedures, a state party retains the right to choose which of the four adjudicatory mechanisms it wishes to confer jurisdiction on. It may accordingly be said that the role of state consent, though relatively diminished, continues to remain an important one even within the so called “compulsory” dispute settlement system contemplated under UNCLOS.
One may conclude, that the fundamental nature of consent recognised in Eastern Carelia remains largely uncontested. However, any discussion on the principle of consent must necessarily address arguments that point to certain practices in international dispute settlement as reflecting a departure from this principle.
The question as to whether the ICJ must comply with requests for an advisory opinion that relate to a pending dispute between states without the consent of the concerned parties has generated significant discussion. Yet again, one may be well served to refer to the Eastern Carelia advisory opinion. The essential ratio decidendi of the PCIJ in deciding to decline to give an advisory opinion with respect to legal status of Eastern Carelia is that the question put to it “concerns directly the main point of the controversy” between two States and that “answering the question would be substantially equivalent to deciding the dispute between the parties”.[12] It has been argued that following this reasoning of the PCIJ, it would be incompatible with the ICJ’s judicial character for it to give an opinion that would concern the main issues in a bilateral dispute without the requisite consent of the parties or to give one that would have effect of circumventing the consent principle.[13] However, while the ICJ has time and again reaffirmed the Eastern Carelia dictum of the PCIJ in principle, it has never applied it in practice while addressing a request for an advisory opinion. It has instead found ways to distinguish it using reasons which may be broadly classified into three categories as follows: upon the merits of an existing dispute, or affect the legal positions of the parties; or (3) the question put does not concern the main point of an existing dispute.[14] In doing so, the ICJ emphasised that lack of consent had no bearing on its jurisdiction to give an advisory opinion. The advisory opinion that is arguably the most relevant to this discussion is the one on Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory, in which the ICJ rejected the argument advanced by Israel and some other States that it should decline to give an advisory opinion because Israel had not consented to the request.[15] The ICJ in its opinion inter alia observed “the consent of States parties to a dispute, is the basis of the court’s jurisdiction only in contentious cases, however, in advisory proceedings, the consent of state parties is not a condition because the court’s reply has no binding force.”[16]. An argument may be made that this approach of the ICJ, whereby it downplays the role of state consent in the rendering of advisory opinions, represents an effective departure from the Eastern Carelia consent principle. In fact, such an argument finds expression in the dissent of Judge Rosalyn Higgins in the Wall advisory opinion itself, wherein she sees “silence” on the part of the Court and draws the conclusion that, “this Opinion by its very silence essentially revises, rather than applies, the existing case law”.[17] The request made to the ICJ by the General Assembly for an advisory opinion with respect to Legal consequences of the separation of the Chagos Archipelago from Mauritius in 1965 has brought this issue to the forefront yet again. In their submissions before the court, the United Kingdom and certain other states have contended that fully answering the questions put to it would necessitate addressing the main or essential issues, including the lawfulness of the detachment of the Chagos Archipelago from Mauritius and ultimately the validity of the detachment agreement, in the bilateral dispute between Mauritius and the United Kingdom without the latter’s consent, and would therefore be incompatible with the Court’s judicial character.[18] It will be interesting to see if the ICJ follows an approach similar to the one it has taken so far by distinguishing this case from Eastern Carelia to justify giving an opinion or if it finally applies the Eastern Carelia dictum to refuse to issue the opinion.
Next, let us consider the issue of expansion of consent beyond jurisdiction by investment arbitration tribunals. The system of investment arbitration was amenable to the proposition that investment protection must take priority over other objectives. The constitutive documents within the investment arbitration system, such as the conventions creating arbitral institutions and treaties creating jurisdiction in them, embodied such a preference.[19] The best example of this is the ICSID Convention, the preamble to which links arbitration and investment protection with flows of foreign investment that is said to facilitate economic development.[20] The expansion of the rules of jurisdiction became the first crucial step in the establishment of a neoliberal system of investment protection. It met with resistance both from arbitrators, who resisted the expansions as being inconsistent with the fundamental tenet of arbitration that jurisdiction should be based on the consent of the parties, and states, who resisted the expansion on the ground that they eroded their sovereignty in areas beyond their consent. In fact, the tensions, created by the assumption of jurisdiction through creatively expansive interpretations, led some states to withdraw from the system altogether. Some tribunals found ways of bypassing the rectifications that the states have sought by interpreting the new provisions narrowly, as happened with the denial of benefits provisions. [21]. While a lot may be written about this issue, the essay restricts itself, in the interest of brevity, to discussing the much-criticised award in Abaclat, wherein the majority held that Italian holders of financial instruments issued by Argentina could bring class actions under the Argentina–Italy bilateral investment treaty (“BIT”). The award not only recognises that financial instruments constitute an investment, but also that their holders could collectively bring a class arbitration against the issuing state.[22] In a strongly worded dissent, Georges Abi-Saab emphasised that the majority erroneously assumed jurisdiction in a case that fell squarely outside the scope of consent given by Argentina in the BIT. He opined that “a mere “consent to arbitrate” does not cover the fundamentally different and atypical proceedings of collective mass claims actions, such as the present one (whether we qualify them as collective, class, representative, aggregate or otherwise), and that a “secondary consent” is required for such proceedings to be covered.” [23]
Last but not the least, an important development that represents a clear departure from the principle of consent in international dispute settlement is that of creation of dispute settlement systems based on compulsory jurisdiction such as, among others, the Court of Justice of the European Union, the European Court of Human Rights, Inter-American Court of Human Rights and the WTO Dispute Settlement Understanding (“WTO DSU”). Unlike the dispute resolution system under the erstwhile General Agreement on Trade and Tariffs, the WTO DSU is compulsory. In fact, membership in the WTO requires an unconditional acceptance of the dispute settlement system of the organization.[24] Further, in a radical departure from previous practice, states can no longer veto the establishment of panels or the adoption of dispute rulings under the new system. A negative consensus of all members is now required to block the establishment of a panel, making the dispute resolution process essentially automatically binding.[25]
From the discussion above, it is clear that while consent continues to play an important role in the settlement of international disputes, there a few notable exceptions to this rule such as the WTO DSU. However, it is possible to argue that despite the compulsory nature of mechanisms such the WTO DSU, their foundational basis still lies in the consent given by states to become members of the relevant treaty establishing such mechanisms (the WTO Agreement in this case).
[1] Status of Eastern Carelia, Advisory Opinion, 1923 P.C.I.J. (ser. B) No. 5, (Jul. 23), p.27
[2] Romano, Cesare P.R., 2007. The shift from the consensual to the compulsory paradigm in international adjudication: elements for a theory of consent. New York University Journal of International Law and Politics, 39(4), p. 792
[3] Professor Abi-Saab, Dissenting Opinion. Abaclat and others v. Argentine Republic, Decision on Jurisdiction and Admissibility of 4 August 2011, ICSID Case No. ARB/07/5, p. 4, para. 7
[4] Case of the monetary gold removed from Rome in 1943 (Preliminary Question), Judgment of 15th June, 1954: I.C. J. Reports 1954, p. 32
[5] East Timor (Portugal v. Australia), Judgment, I. C.J. Reports 1995, p. 101, para. 26
[6] Western Sahara, Advisory Opinion 1975 I.C.J. 12 (Oct. 16), p. 25, para. 32
[7] INTERNATIONAL CENTRE FOR SETTLEMENT OF INVESTMENT DISPUTES. (2003). ICSID convention, regulations and rules. Washington, D.C. 1818 H St., N.W., Washington 20433, International Centre for Settlement of Investment Disputes. Art. 25
[8] ibid, Preamble, para. 7
[9] Abi-Saab, Dissenting Opinion, Abaclat and others v. Argentine Republic, p.7, para. 15
[10]Convention on the Law of the Sea, Dec. 10, 1982, 1833 U.N.T.S. 397, Arts. 287
[11] ibid, Arts. 279-285
[12] Status of Eastern Carelia, Advisory Opinion, 1923 P.C.I.J. (ser. B) No. 5, (Jul. 23), p.29
[13] Yee, S., 2017. Notes on the International Court of Justice (Part 7)—The Upcoming Separation of the Chagos Archipelago Advisory Opinion: Between the Court’s Participation in the UN’s Work on Decolonization and the Consent Principle in International Dispute Settlement. Chinese Journal of International Law, 16(4), p.631, para 15
[14] Ibid, para.16
[15] Aljaghoub, M., 2010. The Absence of State Consent to Advisory Opinions of the International Court of Justice: Judicial and Political Restraints. Arab Law Quarterly, 24(2), p.200
[16] Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory, Advisory Opinion, I. C. J. Reports 2004, pp. 157, para.47
[17] Judge Higgins, Separate Opinion., Wall, ICJ Reports 2004, p. 211, para.17.
[18] Yee, S. Notes on the International Court of Justice, p. 626, para. 4
[19] Sornarajah, M., 2015. Creating jurisdiction beyond consent. In: Resistance and Change in the International Law on Foreign Investment. Cambridge: Cambridge University Press, p.138
[20] ICSID convention, regulations and rules. Washington, D.C. Preamble, para. 7
[21] Sornarajah, M., Creating jurisdiction beyond consent., p.137.
[22] Abaclat, Decision on Jurisdiction and Admissibility.
[23] Abi-Saab, Dissenting Opinion, Abaclat and others v. Argentine Republic, p.70, para. 177.
[24] Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, 108 Stat. 4809, 1867 U.N.T.S. 14, Annex 2, Understanding on Rules and Procedures Governing the Settlement of Disputes, 1869 U.N.T.S. 401, 33 I.L.M. 1226.
[25] ibid, arts. 6.1, 16.4, 17.14.